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Federal Taxation

Business

Quiz 13 :

The Estate Tax

Quiz 13 :

The Estate Tax

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Identify which of the following statements is true.
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Multiple Choice
Answer:

Answer:

B

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In 2002, Gert made a $5,000,000 taxable gift. The 2002 gift tax on $5,000,000 was $2,275.800. Gert was entitled to a unified credit of $345,800, resulting in a gift tax of $1,193,000. The marginal tax rate in 2002 is 50%. Assume Gert dies in 2013 when the credit is $2,045.800 and the marginal rate is 40%, the tax on $5,000,000 would equal $1,945,800 before subtracting any credit. In arriving at Gert's estate tax liability, what is the amount subtracted for 1992 gift taxes paid?
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Essay
Answer:

Answer:

$1,600,000 = $1,945,800 ($5,000,000 taxable transfer at current year rates) - $345,800 (where $1 million is the exemption equivalent for 2002).

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The estate tax is a wealth transfer tax.
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True False
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Answer:

True

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Identify which of the following statements is false.
Multiple Choice
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Reversionary interests in publicly traded stocks included in a gross estate must be valued
Multiple Choice
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The tax base for the federal estate tax is the total of the decedent's taxable estate and post- 1986 taxable gifts if the decedent made gifts in 1981.
True False
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In 2018, the basic exclusion amount for an estate tax return is $10,000,000 before taking into account necessary inflation adjustments.
True False
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An executor can value each asset in an estate at the lower of its FMV at death or the alternate valuation date.
True False
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The FMV of an asset for gift or estate tax purposes is the same except for
Multiple Choice
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For 2014, the unified credit is equivalent to a statutory exemption of
Multiple Choice
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Outline and briefly describe the estate tax computation, beginning with the gross estate.
Essay
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Brent, who died on January 10, owned 10 shares of Potts Corporation stock. The closest trading dates to January 10 are January 8 (two working days before the date of death) and January 11 (one working day after the date of death). On January 8, the stock traded at a high of 101 and a low of 97, while on January 11, the high was 90 and the low was 86. The date- of- death per- share value is
Multiple Choice
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Which of the following is deductible in arriving at the amount of the taxable estate?
Multiple Choice
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The value of stock that is not publicly traded may be determined by considering
Multiple Choice
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Identify which of the following statements is true.
Multiple Choice
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Martin transfers stock to an irrevocable trust and names himself to receive the trust income for life with the remainder interest gifted to his son. When Martin dies,
Multiple Choice
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Listed stocks are valued at their closing price on the date of death.
True False
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Appraisal methods used to value real estate for estate tax purposes may include
Multiple Choice
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In 2016, Clara made taxable gifts of $2 million. This year, Clara dies with a taxable estate of $4 million. At the time of her death, the FMV of the property Clara gifted in 2001 is $8 million. What is the amount of the estate tax base?
Short Answer
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The alternate valuation date is generally
Multiple Choice
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